Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1887-04-15
WESTERN FARM LOANS.
A Chicago View of the Subject.
LChicago Inter-Ocean.1

1t has been found that there are 1874
companies organized for making real
estate loans, which have been incorporat
ed in the States of Kansas and Nebraska
alone. There are also a large number of
Eastern insurance companies as well as
mortgage loan companies in Iowa, Mis-
souri, aud various Eastern States, which
are loaning money on farms in Kansas
and Nebraska, and their agents are scat
tered everywhere. Hence there is found
at every county seat large number of
agents who solicit farmers to take loans
upon their farms, showing how much
money can be made with the money thus
borrowed, and many are induced by the
ingenious representations of the willy
agent to borrow money for various specu-
latlve purposes which would not have been
thought of, except for the loan agent.
In the fierce competition to place loans
with farmers the principal question be-
comes, how much the agent will loan up
on given farm. The following data
come from corresponds hts in Kansas and
Nebraska, who are the most responsible
parties in their respective counties, all be-
ing located at county seats, no two in the
same county From answers to the
question, "What, in your opinion, is the
largest per cent of the present selling value
which any of the said companies loans on
farms ?" we quote the following replies ;
Many of them loan upon the full value, and
some few loans more than property is wort h..
The most careful 90 not exceed % per cent OF
actual value.
+ fly to go per cent.
Aoout ~ per cent, Some loan more through
misrepresentation o. agent.
About 80 to 20 per cent.
Seventy-1ve per cent.
Some loan all or more than the farm may
be worth Others are more conservative.
Some companies are SO anxious tor this class
OF security that they place almost their value.
Twenty live other correspondents gaNc
simlcr replies. In reply TO the question to
the cores pondents above referred to. MS 10
what proportion of the improved farms in
their county was, in their opin on, mortRaged
in any manner, we quote the following replies,
no two replies being IRON the same county;
Fifty per Ct mt
Two tbirds.
One half to two-thrds.
Most all
NIne-tenths.
about per cent.
And SO on through 30 more replies, ali of
similar tenor.
The following question. viz an case
of general failure of crops, is there sui
ticient Accommodations OF cauital in the
hands of your farmers SO that they could
purchase the farms owned by those who
were unable to pay, IN case of numerous
| foreclosures among those mortgaged -
| ~
| jorlty of the replies
There is no accumulation of capital in
the hands OF farmers and III the case of a
failure of crops the loaners would have to
| buy the lands" In case of general
failure of crops in any of these over
mortgaged localities, many holders will
be required to sell their farms at a sacri-
| flee, as at such "A time so much land will
be thrown on the market as to make sales
| impossible except at great loss In our
own State of Illinois there was formerly
quite heavy mortgage debt carried by
our farmers. but never to any such eX-
tent rs is now the case in some of the
states bordering on the Missouri River.
In the days of the early settlement of the
central Western States money was never
as freely offered by capitalists as is now
| the case III Kansas ana Nebraska, where
the average rate of interest paid by the
borrower, including second mortgage
notes, is from eight to Il per cent per an
mum.
1t should also be considered by those
who invest in Western farm mortgages
that large majority OF these loan com
panies, with capital comparatively very
small, guarantee by the million, principal
and interest of the loans which they
negotiate. The question may soon be,
who will guarantee the loan companies 7